Correlation Between Johnson Controls and Coeur Mining
Can any of the company-specific risk be diversified away by investing in both Johnson Controls and Coeur Mining at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Johnson Controls and Coeur Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Johnson Controls International and Coeur Mining, you can compare the effects of market volatilities on Johnson Controls and Coeur Mining and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Johnson Controls with a short position of Coeur Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Johnson Controls and Coeur Mining.
Diversification Opportunities for Johnson Controls and Coeur Mining
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Johnson and Coeur is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Johnson Controls International and Coeur Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coeur Mining and Johnson Controls is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Johnson Controls International are associated (or correlated) with Coeur Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coeur Mining has no effect on the direction of Johnson Controls i.e., Johnson Controls and Coeur Mining go up and down completely randomly.
Pair Corralation between Johnson Controls and Coeur Mining
Assuming the 90 days trading horizon Johnson Controls is expected to generate 1.74 times less return on investment than Coeur Mining. But when comparing it to its historical volatility, Johnson Controls International is 2.84 times less risky than Coeur Mining. It trades about 0.11 of its potential returns per unit of risk. Coeur Mining is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 519.00 in Coeur Mining on November 3, 2024 and sell it today you would earn a total of 150.00 from holding Coeur Mining or generate 28.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.22% |
| Values | Daily Returns |
Johnson Controls International vs. Coeur Mining
Performance |
| Timeline |
| Johnson Controls Int |
| Coeur Mining |
Johnson Controls and Coeur Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Johnson Controls and Coeur Mining
The main advantage of trading using opposite Johnson Controls and Coeur Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Johnson Controls position performs unexpectedly, Coeur Mining can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Coeur Mining will offset losses from the drop in Coeur Mining's long position.| Johnson Controls vs. Samsung Electronics Co | Johnson Controls vs. Samsung Electronics Co | Johnson Controls vs. Toyota Motor Corp | Johnson Controls vs. SoftBank Group Corp |
| Coeur Mining vs. Applied Materials | Coeur Mining vs. Indutrade AB | Coeur Mining vs. Auto Trader Group | Coeur Mining vs. Morgan Advanced Materials |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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